What You Need to Know About VMware’s Acquisition by Broadcom and the Announcements of December 2023 and January 2024

Introduction - VMware’s Acquisition by Broadcom

In January 2024, Broadcom announced a series of major changes regarding VMware, sparking strong reactions within the user community, partners, and industry analysts. These changes include the transition to subscription-based licensing, the simplification of the product offering, and the replacement of VMware’s partnership program with an invitation-only program. These developments, accompanied by controversy, mark a turning point for VMware’s customers and partners.

Transition to Subscription-Based Licensing

Broadcom announced the end of VMware perpetual license sales, marking a complete transition to subscription-based and term licenses. This decision aligns with a strategy to simplify the product offering and respond to market demand for a subscription-based consumption model. Customers can continue using perpetual licenses with active support contracts, but the sale of new perpetual licenses and renewals of support and subscription (SnS) for these offerings has ended (VMware by Broadcom - Business Transformation) & (VMware Blog).

Simplification of the Offering

Broadcom has reduced VMware’s product offerings to two main solutions: VMware Cloud Foundation and VMware vSphere Foundation. This simplification aims to make VMware products more accessible and affordable, with a 50% reduction in the previous subscription price for VMware Cloud Foundation and the introduction of improved support service levels (VMware by Broadcom - Business Transformation).

VMware’s January 22, 2024 article provides additional details on this simplification, including the inclusion of Tanzu Kubernetes Grid in VMware vSphere Foundation and the availability of advanced optional add-ons to meet specific needs such as security, storage, and disaster recovery (VMware Blog).

End of VMware’s Partnership Program

Broadcom announced the termination of VMware’s existing partnership program, replacing it with an invitation-only program called the Broadcom Advantage Partner Program. This decision aims to simplify bundled offerings and increase service revenue opportunities for partners but has surprised many VMware partners, with some expressing concerns and confusion regarding the new program’s details and their future status (The Register).

Controversies and Reactions

The announced changes have triggered controversy and mixed reactions. Customers have reported licensing cost increases of up to 1200%, raising concerns about accessibility and cost management for businesses and organizations, especially in sensitive sectors like education, where a UK university is facing a 1250% increase for VMware support renewal (IT Asset Management).

VMware’s clarification in the January 22, 2024 article was an attempt to address these concerns, emphasizing VMware’s commitment to supporting existing customers and facilitating the transition to new subscription-based offerings (VMware Blog).

Conclusion

The changes announced by Broadcom regarding VMware represent a significant evolution in how VMware products will be sold, supported, and used. While these changes may offer benefits in terms of simplification and predictability for some customers, they also raise challenges and concerns, particularly regarding costs, access, and partnership management. The update provided by VMware’s January 22, 2024 article demonstrates a willingness to respond to customer and partner feedback, highlighting the importance of clear communication and ongoing support during this transition period.

At this point, I’m not sure ending my article with my usual “Enjoy 😎” is appropriate… We still don’t know how this will impact us… On my end, I am currently learning Proxmox to migrate my homelab from the “Free standalone ESXi” version to Proxmox.

See you soon,

AlexIn Tech